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Friday, July 22, 2016

I’m sorry, I have to double my prices

That’s what a friend of mine said just recently to all his clients. Would you be brave enough to do that? And was this truly an act of bravery on his behalf? This is his story.

My colleague, let’s call him John, had a bit of a health scare. Even he would agree he was starting to get a bit long in the tooth, but he was very active and as successful as ever, so he wasn’t expecting this.
He realised he couldn’t keep up the pace, but he didn’t really need to as the online part of his business was doing very well.
So John explained to all his clients his health situation, that he would need to reduce his work load, and consequently had to double his prices in the new year.

Unfortunately for John, everyone said yes. (Bugger!) He even had a conversation with a bank client (which bank?) which went along the following lines:

Bank: John, we just don’t have the budget for this.
John: I’m sorry, I don’t have a choice, but I need to slow down.
Bank: But John, we can’t get what you do from anyone else. Is there anyway you can accommodate an old client?
John: I tell you what, why don’t you tell your boss that I asked for three times as much, and you negotiated me down to double.

John had three things going for him:
• A very clear point of difference
• Clients that understood his value
• Being indifferent to clients accepting his offer

The last point, having decided what he wanted, and being prepared to walk away if he didn’t get it placed him in a very powerful bargaining position. Of course he is now wondering why he didn’t do this earlier.
I’m sure you feel sorry for John. He hasn’t been able to reduce his workload. Perhaps you have some suggestions for him for 2017?